Portland Group Makes Offers For Property To Build MLB Ballpark; Now Comes The Tricky Part

Could Portland, Oregon, host a Major League Baseball team? For the second time in 20 years, boosters in the market are trying to make it happen. (Photo credit: Shutterstock)

On Tuesday, a group in Portland, Oregon, that has been working quietly for months on a plan to develop a ballpark that would host a Major League Baseball team announced that it had made an offer for two properties where the ballpark could be built.

The group, called Portland Diamond Project, is headed by former Nike executive Craig Cheek. It also has former Portland Trail Blazer television announcer Mike Barrett as a spokesman, as well as former Oregon State Senator Jason Atkinson as the group’s strategic business director.

Prior reports have labeled the group as an “ownership” effort, but that’s not accurate. The group was created to facilitate the development of the ballpark, be that for MLB expansion or relocation.

The group did not disclose any ballpark drawings on Tuesday, although its work with Kansas City-based Populous, which has developed the vast majority of MLB ballparks over the last 20 years, reportedly includes more than one.

While renderings have not been made available, designs that would facilitate a retractable roof are in the mix. None of the designs delivered by Populous are final, meaning a roof is an open question, certainly tied to overall costs.

While it is true that Portland sees dry summers, it is not so in spring and fall, and it’s here that the Portland group would need to seriously consider dropping any design that doesn’t feature a retractable roof.

According to the Seattle Mariners, of the eight home games that have been played at Safeco Field this season, the roof has been closed (or started open and was closed at some point during the game) six times since the season started in late March. On average, Safeco Field’s roof is closed 21% of the time during the season. There have been years when the closure rate was as high as 31% (2010) and as low as 12% (2006, 2012). And unsurprisingly, spring (late March through May) and September are the times the Mariners need the roof the most.

And while the roof at Safeco Field is open far more than closed, the real value is in allowing all games to be played. This lowers the risk for those who live outside the market and would likely not make the trip if it’s raining, or even threatening to. This is key because the Mariners say that over half their fans travel from outside King County.

All of this matters to any Portland effort. The market is far smaller than Seattle, so being able to guarantee single-game ticket sales for games where the weather is iffy is critical. But while the roof could help ensure the long-term success of a ballclub in the market, it would clearly add substantially to the overall cost.

That cost, and the dynamic of the group looking to make the ballpark happen, is where some of the most critical questions arise.

The group said on Tuesday that “the management team does not intend to ask the city or legislature to create any new programs to fund the ballpark.” Prior legislation, passed in August 2003, would use the state income tax that players would pay to cover as much as $150 million toward building a ballpark. According to a submission to Major League Baseball at the time, “analysis by the City applying the tiered bonding structure concluded that the bill can provide approximately $115 million in project funding,” but since then, this figure has likely increased.

That means that the cost of a ballpark, which could run from $600 million to near $1 billion, would largely be built using private funds — critical in a market that has historically frowned on the notion of a public subsidy for ballpark development.

Portland Mayor Ted Wheeler did not say he would work to block any efforts by PDP but also did not jump in front of the MLB-to-Portland effort.

“It’s easy to see why Portland would be an attractive option for Major League Baseball,” Wheeler said in a statement. “We’re a growing media market with a booming economy and a rich history of local baseball. But any path that leads from today to Opening Day is a long one. My focus continues to be on addressing our city’s immediate challenges — creating more housing, helping those experiencing homelessness and maintaining a safe livable city. It’s my belief that city resources should be directed to these priorities. We will continue to watch the Portland Diamond Project proposal as it develops.”

The potential stadium location near Portland’s Moda Center, owned by Portland Public Schools, has an assessed value of $100 million. It has light-rail station access approximately a quarter-mile away and trolley service one block away. The city also owns parking structures at the Moda Center that could be used. But the offer for the property by Portland Diamond Project was unsolicited, and while The Oregonian reports that representatives from PDP met more than once with Superintendent Guadalupe Guerrero of Portland Public Schools, at least for now the prospects that the site will be purchased look less than favorable.

"The superintendent listened and reiterated our core mission and priorities, which focus on improving student outcomes," PPS spokesman Dave Northfield told The Oregonian. He added that the district is not "actively marketing" its headquarters property but had received and would consider the unsolicited offer. The school board is scheduled to meet Thursday for its first discussion of the offer.

The location in Northwest Portland, owned by heavy manufacturing company Esco, has an approximate value of $14 million. That location has buses as its only public transportation component and no parking. That would almost assuredly mean that parking structures would need to be built, adding additional cost. The site has some complications because of potential plans to extend Portland’s trolley system, but Esco is reportedly interested in selling the property where a decommissioned foundry currently sits.

The plan calls for 8,000 apartments and other mixed-use spaces to be developed around the ballpark, but there seems to be little chance that this alone would cover the looming expenses.

So how will PDP and the would-be owners of the team generate returns on their investment?

Major League Baseball is not going to thwart progress by the Portland group. Beyond long-term plans for expanding the league to 32 teams, from 30, the effort gives the league leverage against the city of Oakland, providing a potential fallback for the Athletics should Oakland fall short of delivering on the long-sought replacement for the aging Coliseum. Oakland’s current focus, the Howard Terminal location, has its own challenges that may see the use of a tram for transportation woes.

For expansion, the league will look to make new owners pay fees to join MLB’s exclusive club. Given that the Miami Marlins recently sold for $1.2 billion, it is not out of the question to assume that a figure approaching $1 billion may be sought as an expansion fee.

A broadcast deal is a critical piece of any Portland expansion, and there are challenges given that the Seattle Mariners could claim Portland as part of their broadcast territory (their owner has some thoughts on that) and that the broadcasting territory of the A’s and the San Francisco Giants goes as far north as the Albany/Salem area.

One option discussed would be to use regional sports network NBCS Northwest. But if the Trail Blazers are any measure, getting carriage on DirecTV may prove difficult. To date, the Blazers have not been able to ink a deal for distribution on the satcaster.

All of this ties back to PDP and the would-be team owners. How PDP recoups its investment is an open question.

The group would likely lease the ballpark to the owners of the MLB team. It might also seek revenues from non-game-day events such as concerts, motocross events or potentially collegiate football games. If the A’s relocate, these would be thorny matters to negotiate, but an owner of an expansion team would need to control as many streams of revenue as possible to offset the fees sought by the league. How do you pay back the expense to build the ballpark while a team owner wishes to control as many revenue streams as possible?

What is certain is that Portland does have a serious group looking to get in the game.

“Our team has commissioned a comprehensive economic study of both sites, and preliminary reports indicate both possess the right mix of infrastructure and proximity to Portland’s downtown, which we believe serves us very well and is a best practice in other thriving MLB markets,” Cheek said.

As to when details — about such things as what must be a sizable investment group, how the additional funding would be structured, and just how far the group would move if there is no commitment from MLB or potentially the A’s to actually provide a team — will be revealed, that could be weeks, if not months, away. Mike Barrett said the group would not share information beyond the news Tuesday until it becomes officially available.

As was the case before, the group will go about its business quietly, and not through the media. The next word will likely surface on whether the offers made on Tuesday are accepted or rejected. In the meantime, Portland baseball fans will dream, Oakland A’s fans will fret, and Major League Baseball will continue to know that, at least for now, a market is seriously pursuing the daunting challenge of funding and developing a sports facility that will cost hundreds of millions dollars.

Disclosure: I was directly involved in a prior effort in the early 2000s to bring a Major League Baseball team to Portland. While I live in Portland, I am not affiliated with Portland Diamond Project, the current group working to bring MLB to the market.

Other written work of mine can be found at Baseball Prospectus, Fangraphs, and USA Today. Freelance work can be found at Variety Weekly and the New York Times.

My work has been sourced for analysis and commentary in the NY Times, Time Magazine, USA Today, Boston Globe, C...